From Russ Fox, E.A., of Clayton Financial and Tax of Las Vegas, Nevada. All of the items below are for information only and are not meant as tax advice. Please consult your own tax advisor to see how each item impacts your own situation.

Phoenix Woos California Businesses

“For every action, there is an equal and opposite reaction.” That’s Sir Isaac Newton’s Third Law of Motion, something I learned in physics years ago. It’s also true about what happens when taxes increase. Options that businesses would rather not look at become things businesses start considering.

For years I’ve noted that as California increases taxes, businesses start looking at moving to Las Vegas, Denver, and Phoenix. Shock of shocks, with Proposition 30 passing in California, the Greater Phoenix Economic Council decided that now is a good time to actively pursue California businesses. Yes, Phoenix’s summer climate is brutal (just like Las Vegas), but there’s a good workforce, low taxes and regulations, and plenty of housing.

A hint to California: As you continue making the state more and more hostile to businesses, businesses are forced to react. No business wants to move (it’s expensive and disruptive), but like my business that moved last year, eventually the desert wastes of Las Vegas or Phoenix start looking really attractive.